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NBA negotiating with the Silnas to end the Spirits of St. Louis deal

The NBA is engaged in settlement talks with Ozzie and Daniel Silna to end a contract that has long been described as "the greatest sports business deal of all time," according to sources close to the situation.

No agreement has been reached, but talks are ongoing.

The Silna brothers are the former owners of an old ABA franchise known as the Spirits of St. Louis. When the ABA merged with the NBA in 1976, the Silnas agreed to dissolve their team in exchange for a small percentage of the NBA's future broadcast revenue.

At the time, it seemed like an irrelevant concession by the league. But it's become a financial windfall for the Silnas. They receive 1/7 of the television revenues of the four ABA teams that were absorbed: the Spurs, Nuggets, Nets and Pacers. The NBA currently has $7.4 billion in TV contracts with ABC/ESPN and TNT.

The kicker in the Silnas' deal is that it goes on in perpetuity.

Last season, the Silnas, who bought the Carolina Cougars for $1 million in 1973 before moving the club to St. Louis, received a reported $19 million from the NBA.

Since the deal was reached in 1976, the league has paid the Silnas $300 million in TV royalties. Recently, a judge ruled that the brothers also have rights to Internet revenue.

Because the Silnas' cut diminishes the dividends of the NBA's 30 team owners, the league has long sought to settle the contract.

Good luck, not like it's the first time they've tried. But at least they're still trying I suppose.

Re: NBA negotiating with the Silnas to end the Spirits of St. Louis deal

Granting them an expansion franchise seems like the only way to end it. I wonder what would happen if they tried to buy an existing franchise while still earning the money.

The league wouldn't allow them to be owners of an NBA franchise if they were receiving more than their cut. The NBA can't legally cut their cash flow off, but they can prevent them from owning an NBA franchise.

My prediction: Solomon Hill is going to lead the team in Surprisingly Good Plays for the year. -10/29/2014

Re: NBA negotiating with the Silnas to end the Spirits of St. Louis deal

Granting them an expansion franchise seems like the only way to end it. I wonder what would happen if they tried to buy an existing franchise while still earning the money.

The NBA would never approve it. I agree that they're going to have to make another franchise in St. Louis or wherever they would want is the only way out really.

No set amount of money is going to get it done, basically they've won the lottery just getting annual payments until the end of time, giving them a lump sum won't work. I think the only other way it would end is for the 2 Silna's to die and their offspring be stupid enough to take a lump sum.

"It's just unfortunate that we've been penalized so much this year and nothing has happened to the Pistons, the Palace or the city of Detroit," he said. "It's almost like it's always our fault. The league knows it. They should be ashamed of themselves to let the security be as lax as it is around here."

Re: NBA negotiating with the Silnas to end the Spirits of St. Louis deal

Re: NBA negotiating with the Silnas to end the Spirits of St. Louis deal

The fact that there is no time limit to the deal says to me these guys are super stubborn and greedy, and as long as they are alive this deal won't end. You might be able to get a court to rule the deal is over once they die, depending on the wording of the contract. If it uses their specific names, ex-owners, or something along those lines that doesn't explicitly include allow for it to be passed on to other relatives I would think would be enough to get the deal voided upon death.

Re: NBA negotiating with the Silnas to end the Spirits of St. Louis deal

According to a poster on RealGM who's done extensive research on this, the NBA tried to buy out the Silnas family in the early '90s. The Silnas' waned $8M, but the NBA's best offer was $5M. Yeah... bad move, NBA.

I'd love to see someone educated on this subject make a realistic estimate as to what the deal is worth in terms of a one-time, lump-sum buyout. $20M a year, with those rates growing as TV and Internet revenue continues to increase... wow.

Re: NBA negotiating with the Silnas to end the Spirits of St. Louis deal

The fact that there is no time limit to the deal says to me these guys are super stubborn and greedy, and as long as they are alive this deal won't end. You might be able to get a court to rule the deal is over once they die, depending on the wording of the contract. If it uses their specific names, ex-owners, or something along those lines that doesn't explicitly include allow for it to be passed on to other relatives I would think would be enough to get the deal voided upon death.

I'm not really sure how that makes them greedy. If they're not getting the money, it's not like the money's going to charity. It's going to fall into the hands of other rich people.

My prediction: Solomon Hill is going to lead the team in Surprisingly Good Plays for the year. -10/29/2014

Re: NBA negotiating with the Silnas to end the Spirits of St. Louis deal

I don't know how that deal doesn't make them greedy when no other ABA team has such a deal. At least those other rich people would be doing something to actually earn that money.

There was only one other ABA team, Colonels, they accepted a smaller lump sum payment. They probably could have got this as well.

This deal is realistically worth so much its insane. With a new contract to be negotiated in what 3 years, we can expect the amount to go up by a bit. Say that deal is for 8-10 years. Thats 11-13 years at 20 million a season. Unless we expect basketball to wane in popularity by a wide margin. This is worth Billions.

Re: NBA negotiating with the Silnas to end the Spirits of St. Louis deal

I'd tell the NBA 200 million or stop wasting my time. Seriously. That'a high enough to get what they would realistically need to consider ending the deal and low enough that the NBA would have to think about it. Even then 200 million is pretty low given the potential long term value of this deal.